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The SSS case: Some are smarter

(Second Installment)

You’d think that our country’s elite, its richest people, would consider it their civic duty to contribute their talent and experience in helping the nation run the state corporations efficiently, that they would ask only for a token compensation, or at most one only at par with that of most government officials.

Far from it.

President Aquino’s appointees in state corporations have been squeezing as much as they can out of their posts. As I wrote in my column last Monday, Gregorio Yu, a Chinese-Filipino billionaire whom Aquino handpicked as private sector representative at the Government Service Insurance System, had no qualms in taking home P8 million as director’s fees and bonuses in the past three years.

I even suspect GSIS President Roberto Vergara’s $800,000 earnings from the biggest insurance and pension fund in the country in the past three years is bigger than his income as director in a tiny fund-management outfit he and his more senior colleagues had organized in Hong Kong.

But perhaps you can’t blame Vergara: at 52, he would still be concerned about accumulating enough money for his retirement.

But I cannot fathom what motivates the 74-year old chairman of the Social Security System, Juan B. Santos, to approve resolutions authorizing bonuses that bloated his and his colleagues’ earnings there to P4 million each in the past three years. That’s just what a Cabinet secretary such as his mentor, interior secretary Mar Roxas makes in a hectic 24/7 job. And Santos’ isn’t even full time at SSS.


Santos’ SSS income would even be just loose change for him, as he sits in the board of so many private corporations that to list these would fill half this column. And not just run-of-the mill firms but among the biggest ones owned by the Philippine elite and the multinationals, among them First Philippine Holdings, Phinma, Zuellig Group, Sunlife Grepa Financials, Coca-Cola FEMSA Philippines.

I had even thought that having worked most of his life serving the world’s largest food company, Nestle, and leading it here, in Thailand, and Singapore to generate and remit to Switzerland huge profits, he’d think of serving his country pro bono in his septuagenarian years, and be a model for committed citizenship. (I don’t think his five-month stint as industry secretary in 2005 counts as serving the country: He spent most of his time then conspiring to topple President Arroyo with the infamous Hyatt 11 gang.)

But Santos is perhaps smarter, treating his post in the country’s social security institution as if t were a private firm benefiting from his corporate wisdom, which should pay him the rates close to what he gets from the likes of First Philippine Holdings and Phinma.

Santos in fact earns more because of his post at SSS than what is shown in the state firm’s records.

Not too widely known is that Santos, SSS president Emilio De Quiros and most of the state corporation’s board members (officially called SSS commissioners) sit in the board of directors of private corporations in which the state pension fund has investments in.

Santos didn’t of course pick the smallest company SSS has investments in, but the largest. He’s been a board member since he was appointed SSS chairman in Philippine Long Distance Telephone Co. and Philex Mining.

In an email reply to my queries, both Santos and De Quiros claimed that everything they’re paid in these firms are first remitted to SSS, which then gives him what’s legally allowed. Those emails though were in October, and I did not receive until yesterday the data I asked for on how much these earnings were exactly.

I was told however by my sources these would at least amount to P2 million yearly, especially with the P40,000 fee per board meeting that’s held at least bimonthly. Add these to Santos’ earnings of P4 million from SSS itself, and he got P10 million in his part-time job at the state firm in the past three years. The tuwid-na-daan it seems is paved with gold.

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The same is the case with SSS President De Quiros, who for some reason I am unable to discover, was picked out of probably twenty executives lobbying for that job. De Quiros spent most of his working life in the Ayala conglomerate’s insurance firms, whose assets are a tiny fraction of the P350 billion SSS reserve funds.

De Quiros sits in the board of the Aboitizes’ Union Bank of the Philippines and Henry Sy’s Belle Corporation, both of which SSS has investments in. He reportedly also earned P2 million per year from these firms, which, added to the P11 million of his pay from SSS itself in the past 3 years, means that his earnings as SSS president and as board member in Union and Belle totaled P17 million from 2011 to 2013. Not bad for somebody plucked out of retirement.

Yet Santos and De Quiros still pushed for bonuses for themselves and their colleagues in the board?

Reacting to criticisms that SSS gave hefty bonuses to its commissioners, which even if legal, was not moral, De Quiros said: “You have to be able to get the right individuals to manage the institution.”

De Quiros is pretending to be naive. SSS is another government corporation Aquino uses to reward his friends.

Commissioner Eliza R. Antonino, who was even SSS chairman for a year until somebody probably told Aquino that it raised eyebrows to have a 32 year old who was in the hamburger business, to head the country’s biggest pension and insurance firm. She was replaced as chairman in 2011 but retained her post as commissioner, and her directorships at Union Bank and Philex Mining.

She has two big qualifications to be SSS commissioner: (1) She was Aquino sidekick Mar Roxas’ Chief of Staff and (2) she is a scion of the powerful Antonino clan of General Santos, a big supporter of the President, and a sister of three-term South Cotabato congressman Darlene A. Custodio.

Diana P. Aguilar is the only commissioner without a directorship in a firm with SSS equity. She doesn’t need it: She is probably the richest among SSS commissioners.

She is the daughter of tycoon Jose T. Pardo, one of Aquino’s big supporters among businessmen. It was Pardo who pushed for the law that opened retail trade to foreigners when he was Estrada’s trade secretary. A Taiwanese company invoked the law to become the majority owner of his firm 7-Eleven Philippines, the biggest convenience store chain in the country now. (See my June 2 and 4, 2013 columns).

Diana Aguilar is said to be Pardo’s heir apparent, and is a board director in her father’s firms that include 7-Eleven, Wenphil Corp. (franchises of Wendy’s Hamburger), and Phoenix Petroleum Corp.

Three of the SSS commissioners come from the labor sector, two of whom seem to have fully embraced the perks of capitalism:

• Daniel Edralin was a union organizer in the hotel industry, and headed the National Union of Workers in Hotel, Restaurant and Allied Industries. He was allocated a directorship at the Union Bank, and is even a member of the bank’s Market Risk Committee.

• Ibarra Malonzo was a labor lawyer based in Mindanao. His being a vice-president of the Liberal Party for Southern Mindanao earned him his post as SSS commissioner, and a directorship at the tuna fishing and canning firm Alliance Select International.

Believe it or not, I pity Aquino’s frontline officials like Presidential Spokesman Lacierda when I see them on TV with their haggard faces and crumpled barongs, so under pressure in their jobs raising high their yellow banners, while people like Santos and Aquino’s friends are enjoying their huge directors’ fees by just nodding their heads and being cooperative at board meetings in government corporations.

Some are just smarter, I guess.